ENGIE

ENGIE is entering into exclusive negotiations regarding the potential acquisition by the Belgian State of all of ENGIE’s and Electrabel’s nuclear activities. Whatever the final terms, this is a strong BUY signal.

The contemplated transaction covers the full scope of nuclear activities currently owned and operated by ENGIE and Electrabel and their affiliates, including the entire fleet of 7 reactors, associated personnel, all nuclear subsidiaries, and all related assets and liabilities, notably decommissioning and dismantling obligations.

This last point had long been a Sword of Damocles hanging over the group, subject to triennial revisions by the Commission for Nuclear Provisions, with significant uncertainty surrounding the true cost of dismantling beyond 2036. In theory, that horizon may now extend, as Belgium has shifted course: under Bart De Wever, the country has reversed its nuclear phase-out policy, with Belgian MPs repealing the landmark 2003 law on 15 May 2025.

Under the terms of the Letter of Intent, the Belgian State will carry out a comprehensive due diligence review of these nuclear activities. The outcome remains uncertain, and the signing of the Letter of Intent does not constitute a binding commitment to complete the transaction.

The probability of failure is therefore plausible, but we consider it low, as ENGIE is clearly seeking to exit a business that no longer sits within its strategic focus, now centred on renewables and regulated networks.

Expert Opinion:
This a potential game changer and removes a key level of uncertainty on the name.  This could (should?) trigger a rerating of Engie towards the likes of an RWE or an Iberdrola. Dividend is detaching today.

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